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FSA's blueprint to make banking safe

Robert Peston | 22:00 UK time, Tuesday, 17 March 2009

The row over Sir Fred Goodwin's pension is just one unseemly manifestation of a banking crisis that has brought the global economy to its knees.

Lord TurnerHow do we prevent a repetition of this crisis?

Tomorrow we'll have the blueprint of the City's watchdog, the Financial Services Authority, drawn up by its chairman, Lord Turner.

He will make proposals to put the brakes on banks lending too much during boom years, to restrict their ability to take excessive risks (for those who want the technical detail, there'll be an endorsement of the imposition of counter-cyclical capital adequacy rules).

There'll also be a thumbs-up for a so-called backstop restriction on what banks can lend relative to their assets at any point in the economic cycle (so-called leverage limits).

Also, Turner will say that banks should be forced to hold more cash or liquid investments, to make them less vulnerable to collapse when other sources of finance dry up.

None of this is terribly surprising. In a way the tragedy is that it's required financial calamity to bring about an outbreak of common sense.

Among other recommendations, Turner will recommend that banks publish more and clearer information in their accounts about the risks they're running.

And, to the possible alarm of eurosceptics, he will say that a new pan-European body may need to be created to set standards for national regulators to follow - and that national regulators will need to work more closely together in regulating the activities of international firms.

FSA entrancePerhaps most importantly he will repeat his pledge that the FSA will become less trusting that banks are usually doing the right thing; the FSA will abandon the prevailing dogma of the past 30 odd years that the market is always right.

So in theory, if the FSA had been operating along the lines set out by Turner, it wouldn't have allowed Northern Rock to become too dependent on unreliable wholesale sources of funding

It wouldn't have permitted Royal Bank of Scotland to buy the poisonous rump of ABN, the former pride of Dutch banking.

And it wouldn't have allowed HBOS to lend billions to property and building companies that analysts believe were always going to struggle to repay their debts.

Or at least that's the theory.

In practice we can't expect any regulator to be infallible.

But it won't be business as usual for any of us till we're confident that the financial economy is operating in a way that supports our prosperity, rather than undermining it.

And for that we need confidence that the FSA, and other regulators around the world, are doing their job properly.


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  • Comment number 1.

    why wasnt this kind of regulation already in place....because with this regulation there would have been no boom, no feelgood feeling and consequently this government would have never won the last election......

  • Comment number 2.

    Oh YAWN? We've heard it all.

  • Comment number 3.

    Its BEEN OBVIOUS since 2002 that we would end up where we are now.



  • Comment number 4.


    Alexander curzon is back all is forgiven

    No 4 on this blog

    Just missed the medals

  • Comment number 5.

    So no news from teh FSA re restricting mortgage lending. I reallyhope this does not come to past as this would be regulatory closing the stable door after the horse has bolted.

    No news on Barclay's on the BBC today, whilst CEO Varley was with the other bankers today saying how clever he was, there are stories afoot about their aggressive tax planning which maybe the next 'bank' crisis to come.

  • Comment number 6.

    Yesterday...#140. At 2:05pm on 17 Mar 2009, stilllitterarty wrote:
    When people become freemasons they agree to never discuss fractional reserve banking in public.

    Is this true Robert?

  • Comment number 7.

    This seems rather premature as what has yet to be clearly seen is just how much more impaired assets are hidden from view in the balance sheets of bank's offshore - and largely hidden - holdings.The full damage of the derivatives that are supposedly hedged in a merry go round of liabilities by insolvent banks and other financial companies that can only now survive through the un-voted for largess of the taxpayer will undoubtedly play out over many months and perhaps years yet.The big question is can this system ever be propped up to the point it can work again and if so at what final cost? If not what new formula of accelerating and underwriting the performance of money (debt) to generate the levels of investment and growth needed for global stability in markets can we rely on? It is this that will require regulation when it emerges. At the moment we are still pursuing the past - and may be wasting vast sums of money going nowhere useful in the process.We know now that what was past practice does not work.Unlikely therefore that anyone will have confidence in it in the future. Time to move on and define what The Global Republic will really look like in terms of method and regulation.

  • Comment number 8.

    I'll repeat part of what I said before if I may:

    Either the free market applies, and bankers are allowed to fail and lose everything like any other private enterprise, OR they become civil servants, highly regulated and accountable to the state and the public - WITH CAPPED PAY.

    In the meantime Robert, as many bloggers are suggesting, please write SOMETHING about what's happening in the real (ie non-banking) economy to real people. How is this crisis affecting wages close to the bottom, and what effect will that have on deflation?

    If we are to experience deflation, then how we print money becomes important. Rather than finance the banks to "lend", cut out the middleman. There ARE historical examples of where printing money worked, because it was done intelligently, proportionately and in moderation. JK Galbraith cites, amongst others, the examples of Maryland and Pennsylvania in the mid-eighteenth century. They anticipated Douglas' Social Credit theory by 150 years.

    Money is merely an entitlement to consume goods and services. Much of this entitlement has been destroyed by the current crisis. If money is to be printed for "fiscal stimulus", why not give everyone spendable tax credit vouchers - tapered towards the poor who will actually spend it. And/or give British manufacturers a tax rebate in proportion to their sales - this might help redress some current imbalances.

  • Comment number 9.

    So no need for an official announcement as you have all the details. Except that it allows yet more opportunity to make out that the only culprits for the global crisis are the (UK) banks. On top of the select committee chairman using today's hearing to promote this and purely protect his party we now hear that the publication tomorrow will "force" banks to manage their balance sheet much better in the good times. Well, Robert, why no mention of the biggest culprits here, ie Calamity and his his Treasury accolytes??? We're back to whitewashing the facts and you are doing your best to protect the Govt.

  • Comment number 10.

    Robert Preston should leave RBS or the government to sort out Sir Fred's pension.

    This focus on his ppension is a distraction from the banking debacle, everyone is or will be affected in th elong term and the short term.
    what I want from the media and Robert Preston, is anlysis and a clear exposition of the impact it will make on all of us and a debate and evaluation of ways forward.
    The focus on Sir Fred's pension by Robert Preston devalues his skils, intellect and experience.

    I am finding it increasing difficult to maintain my equilibrium because of this constant hyping of the banking situation and a very noticeable lack of informed analysis , comment and signposts for the future.

    furthermore, i am amazed that there has been so little backlash about Harriet Harman's comment about the court of public opoinion. The court of public opinion is a very dangerous road for a nation.

    There is either a legal way to resolve Sir Fred's pension or not. If there is a legal way the government will find it, if not, so be it.
    Stop using the pension issue to mask the lack of forward looking analysis and debate

  • Comment number 11.

    Supervision of the banks should be returned to the Bank of England. FSA is not fit for purpose and never will be.

  • Comment number 12.

    Well I am not holding much hope out. If the SEC and FSA failed to see the blindingly obvious over the past few years that banks were overlent and risk/reward ratios were out of the window, then surely, any remedial action now must be accompanied by tough laws and penal sentences. Its no good citing civil court remedies if things go wrong. Rules must have teeth to be effective.

    I hardly believe anyone will face the slammer for the white collar activities of gross misconduct bordering on the criminal that we have witnessed in recent years.

    We are asked to trust bankers and regulators (for the politicians). Fat chance.

    Someone sent me an email today that says it all. It is a quote from Thomas Jefferson in 1802 in a letter to the Secretary of the Treasury, Albert Gallatin, 207 years ago. It is worth saying here even though it is an American observation. It rings true today.

    "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American banks ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."

    Apply this notion today to all banks in the Western World and many in the emerging economies. The portents for humankind are not good are they?

    What goes around comes around?

  • Comment number 13.

    No possibility, then, of a clear, unambiguous statement, supported by respected independent analysis, of precisely what toxic waste continues to lie in the banks' books, then?

    Without there being in place a complete confession of the true nature of the existing situation as a point of departure, what possible confidence can anyone have that Turner's succession of statements of the bleedin' obvious will lead us all into a brave new world of secure banking?

    Let us know where we are, before trying to convince us that you know where we're going, Your Lordship.

  • Comment number 14.

    In bad times we want scapegoats and regulation.

    In the good times we want the freedom to make the most of it.

    What we actually need is more freedom in the bad times, to encourage invention and risk taking, and more regulation in the good times, to prevent excess. But we humans are bad at collective risk management. Nothing will change, ultimately.

  • Comment number 15.

    The FSA must be spooked into meaningless action (the horse bolted about 7 years ago FSA) by the silent run on banks that is already happening.

    People are sick and tired of the high street banks and their management and are looking for ethical alternatives. Some of us will be sending out an e-mail circular urging the same in the next few days.

    Remember it is still the same old people with the same old COMMON PURPOSE (see BBC 5 live website)in the boardrooms of the banks and the FSA.

    They are only proposing this as it appears to suggest they are doing something about it while they all keep their jobs and their privalidged positions.


  • Comment number 16.

    with or without the new FSA regulation ,it seems obvious that house prices will continue to fall for some considerable time, the 'feel good' factor will not return quickly. burglaries of country houses that are not protected will increase. people have been conditioned to believe that money ( and material wealth ) is all we need...consumption could not go on unchecked a return to a more simple less stressful life may be a good thing..we will be healthier taking the dog for a walk in the fresh air.. as we all lose our jobs.

  • Comment number 17.

    Nothing wrong with this kind of conventional regulation, but I am also drawing up proposals for a regulator who measures and takes into account behavioural/cognitive biases as part of its evaluation of economic stability:

    Hector Sants hinted at something a bit like this last week (also covered in a previous posting by Robert). The point is that irrational investor behaviour is hard to correct only with rational incentives.

  • Comment number 18.

    [Unsuitable/Broken URL removed by Moderator][Unsuitable/Broken URL removed by Moderator]As Gordon Brown said yesterday - The G20 must have a focus on the poorest and most vulnerable - we need fundamental reform of the international regulatory system. With the G20 approaching it is time for unified action. A more positive and resilient economic mindset is required. [Unsuitable/Broken URL removed by Moderator]

  • Comment number 19.

    Most of that was standard practice after the last depression. Capital adequacy rules, who would have thought it? We learn the wisdom of the ages the hard way again.

  • Comment number 20.

    Yes, certainly need better banking regulation. However this will have only a limited impact if not linked to a global banking regulation that strictly controls tax havens and offshore banking.
    Please read more about the scandalous details how trillions are hidden away from the tax authorities and how this corrupts the global financial system:

  • Comment number 21.

    You pose the question: "How do we prevent a repetition of this crisis?"

    I think that you could be the person to make a big difference here. However, so far you have failed to inform the public about the root cause of the current crisis. I find it incredible that you have never mentioned the word "neoliberlism". This is, after all, the political, economic and philosophical doctrine that has led to this crisis. The Australian PM, Kevin Rudd, recently wrote an 8,000 word essay on how neoliberalism has wrecked the world economy. You have written 0 words about this. ( )
    It is vital to understand the reasons for the crisis in order to prevent it happening again. So why are UK business journalists failing the public by refusing to discuss neoliberalism and put it in the public domain? Would it have anything to do with the fact that it is an Anglo-American doctrine and would therefore put at end to Gordon Brown's career?

    (Why not take a leaf out of Paul Mason's book and at least mention the unmentionable once - I dare you!)

    Dr Clive Peedell
    North Yorks

  • Comment number 22.

    Have you noticed all these top bankers have a good head of hair?Distinguished?Some steely grey,some black as the night.Is it a pre requesite that the person who is going to kai bosh your retirement has more hair than the hairy devil himself?

  • Comment number 23.

    Why was the GLASS-STEAGALL ACT repealed?
    If it had not been repealed would we be a lot better off now????

  • Comment number 24.

    Peston says: "But here's the terrible truth: we need banks and bankers, to secure our own future prosperity." Robert, this is a mistake, because you are limiting yourself to a bi-polar argument. For truth read lie. Banks and bankers have become unsucessful parasites that will indeed cause the END of prosperity by sucking in all the wealth. Unsucessful I say, because smart parasites do not kill the host, but that's greed for you! If you think this is an unrealistic scenario, then I have to say, just keep watching! And don't bank on the governments' who are now showing themselves to be breathtakingly incompetent and clearly out of control, not materially different to the parasite analogy above. East/West - Republican/Democrat - Labour/Conservative, as the encyclopaedia salesman says: 'would you like the red cover or the black one?' Don't be fooled by these bi-polar choices, there is ANOTHER way!

  • Comment number 25.

    It is a massive admission of failure,on the part of the of england and government to now start thinking along these lines.

    If they say the banks need to hold more assets (which they should have done all along) then how is this going to help anyone...they will just take the tax payers money for this and not release it for loans.

    What should have happened is the Banks should have been allowed to go to the wall,we could then have picked up the assets at a pitance and started with a clean sheet,with a nationalised bank....

  • Comment number 26.

    Robert Preston:
    How do we prevent a repetition of this crisis?

    Simple, put in regulations into effect, so all of the parties are well-aware of the rules of play....
    ~Dennis Junior~

  • Comment number 27.

    But it won't be business as usual for any of us till we're confident that the financial economy is operating in a way that supports our prosperity, rather than undermining it.

    This is scary. We should never want to be back to business as usual.
    And no naming and shaming of every member of this little boys club yet?
    The FSA should force serious financial accounting requirements for all businesses in order to qualify for loans.
    And importantly, the FSA should and the politicians should ensure that every company and every bank pay full tax liability - no dodging, no ducking and make sure this country is never seen as a tax haven by any person or organisation. Will they finally stop this nonsense about high salaries attracting the brightest, too? We all realise these huge benefits attract the greediest, and most selfish.
    When I see this, I just might give them all the benefit of the doubt.
    I'm going back to hide under my duvet. This system is more infected than an abcess.
  • Comment number 28.

    Will Gordon's treasury be held by the same regulation?

    Looks like the regulator for the NHS needs to get a grip too, a bit more of the light touch.

    If the horse is in the next country, what is the point in bolting the door?

    Having hobbled the banks with the recapitalisation, how will these regulations affect their profitability going forward so that the next incoming government can lift them off the balance sheet at the first available opportunity?

    Will he define the floor? So that we reach it very quickly? Real pain for all those who have just bought?

    Deflation, and stagflation to pay off the debts?

    Please let someone in who actually has a plan of action

  • Comment number 29.

    Now blogger!

    Think your techie guys need as much of a dressing down as the bankers!

    It looks nice though I am wondering when the new additions to the moderation staff will be available to speed things up

  • Comment number 30.

    Not impressed so far with Turner's ideas, Robert.

    Looks pretty weak to me.

    But Mervyn is talking much more sense.

    Read what he's been saying - sensible things like the fiction of thinking one is able to prevent future patterns of behaviour - "The essential problem is that we can no more bind our successors than our predecessors were able to bind us."

    The best thing we can do for our successors is to provide them with much more information - to force the banks..... in fact all financial intermediaries..... to open themselves up to public scrutiny.

    The day of the banking black box should be over.

    We need open transparent banks.

  • Comment number 31.

    As I write this, sterling is at a very low point against the Mexican peso! Can you adam and eve it? Mexico! Mexico is a hopeless third world, corrupt, incompetent soon to be destabilized state to be over-run by the druggies. And the pound can't even hold itself against that!

    Why isn't anybody being prosecuted, fired without payoffs and sent to St. Helena? Or they can come to Mexico where corruption is part of everyday life.

  • Comment number 32.

    The banks are to tell the regulator of the risks they are running but they don’t know the risks they are running because if they did they would not be doing it

    This will be good

    See the numbers are still moving 161 now on Good wins tax break or is it me?

  • Comment number 33.

    FSA is an expensive waste of space and should be put out to grass (without generous pensions all round). The FSA proposals MIGHT have had some effect on the problems which have occurred, but this is with hindsight and the precise measures are vague and unclear so may not have had any effect at all - the devil is in the detail. The major problem is that the FSA is always BEHIND events, so the next banking wheeze will probably get past the brainless at the FSA with ease.

    What the FSA proposals will probably result in is micro checking of all the little bits of information they can lay their hands on, burdensome regulation, acres of stupid checklists and the stifling of best business practice.

    What is required is a clear set of policies and detailed criteria which banks will have to meet at a high level. New ratios will need to be created which need to be followed. ALL bank transactions should be ON BALANCE SHEET, NO off-shoring. No banking product should be capable of being used in the market unless it has been very carefully risk-assessed by both the bank concerned AND the FSA. Failure of FSA regulation should result in the sacking of the responsible directors (without pension). Taking undue risks should also result in the sacking of the finance director of the Bank concerned at the very least. Any bonuses should only be payable after 5 years of assessment (or longer for longer term products).

    These thoughts are just the product of a few minutes thinking - I am sure I could come up with mcuh more if I didn't fancy going to bed!

  • Comment number 34.

    Business schools face test of faith

    "I absolutely still believe in capitalism - just with more substance and transparency," Mr Brown said.


    Is that belief much different than a religious belief. All religions have their dogma. Wouldn't it be better to focus on seeking the truth instead of believing it is true?

  • Comment number 35.

    There is one simple way out of this mess that will make 'Fred the Shred' budge without the need of seeing the inside of a courtroom - tax him bone dry - even if it takes to write a bill specfically targeted at him.
    The goverment wants to re-coup the money that it awarded for failure. The goverment has the most simple yet most effective means at its disposal of collecting money from people - tax.
    This is being mulled over in the states for a similar mishap at AIG. I can't see why it should not happen here.

  • Comment number 36.

    "How do we prevent a repetition of this crisis?"

    It isn't possible to prevent. It is just a smokescreen so the bully's and criminals can run away with all the loot and then justify maintaining the system.

  • Comment number 37.

    More gimmicks?

    Does he meant it? Probably.
    Will it appear to work? Probably, for a few years.
    Will it really work? Nope. There will be new robberies, new swindles when the goose has recovered. Followed by new innovations in making excuses, spicer speeches, and more complex regulations which are hard to understand, impossible to enforce and easy to bypass and undermine if you have money and extensive network of insiders.

    Just like this time, last time, the one time before that ...

    Rewards should be gradual and long term (20 years). Risks should be made personal. Both should be closely tied to the prosperity and security of the nation.

  • Comment number 38.

    oh well all back to normal then then I woke up and realised I wasn't having a nightmare it was real

    Ha Lord Turner says blah dee blah dee blah , it won't get a chance to do what it should have done in the first place, because the UK has no money , G20 will announce a new currency, I see reports of a super currency being drip fed out, but don't worry the mega rich have their tucked away and as they are making the rules up they will be ok, but we will have a devalued currency compared to what we have now.
    The UK and the US don't have enough money to cover their spending plans and liabilities, in effect bankrupt.

    Maybe Robert and his Red hand Gang or whatever they are called will save us

  • Comment number 39.

    The FSA bottom line on a photocopier is hardly going to deter the safe crackers posing as CEO'S ,not even in A3.

  • Comment number 40.


    I don't think it was too much lending during the boom years that did the banks in. It was bad lending.

    I see the banks in the same way as Alexander the Great, who wept when he realised there were no worlds left to conquer.

    I think the banks ran out of people to lend to, so they started to lend to people that they shouldn't. They were seeking growth in a saturated economy.

    So if there are now curbs on lending, this will result in a form of collective punishment on the people in the West who borrow and repay properly. It will also stifle innovation and growth and make our society a bit too static. RBS, apparently the main culprit, was lending money to people willy-nilly without proper diligence, like Bernie Madoff.

    Capitalism is about risk. What happened here was not capitalism. Yet capitalism will suffer because it is being blamed because some bankers dreamed up ridiculous financial instruments backed by domestic property or lent money to charlatans who were not directly in the business of innovation or creating growth. In a world with relatively low interest rates (in the UK, they got as high as 15% in 1992 during a currency crisis) they were chasing high returns in fantasyland.

    The consequence of this is that we have arrived at a new Clause 4 moment. But this moment is actually the reversion to Clause 4 as the state increasingly controls the means of exchange and as a consequence controls the economy in a manner that only Marxists dreamt of.

    Left to their own devices, I presume that British banks would have defaulted on their loans from creditors worldwide, which would have resulted in a mass outflow of foreign money out of the UK which would have led to economic collapse and the possible rise of extremism. This is what the government is trying to avoid I presume.

  • Comment number 41.

    wont make the slightest differance, the whole system is based on greed and that wont change.brownwatch 439 days.

  • Comment number 42.

    With respect, Robert, surely what matters is not the FSA and enhanced regulatory reform of the banks, BUT REGULATORY OVERSIGHT OF WHETHER OR NOT GORDON BROWN, ALISTAIR DARLING, YVETTE COOPER, LORD MANDELSON AND LORD MYNERS ARE 'COMPETENT PERSONS' (as the Building TRADES put it) TO GET US OUT OF THIS MESS.?



  • Comment number 43.

    Perhaps Executive remuneration should reflect the fact that they are plain and simple vanilla employees just like the rest of us.
    Perhaps caps should be placed on how much these 'Executives' can earn by way of salary and bonuses. Perhaps 'Executives' should be required to pay 50% of their share options upfront rather than 100% after the fact.
    Perhaps there should be clear and determined limits of reward to prevent short term risk taking that is not governed by the people that really own the money they are playing with, namely the shareholders.
    Banking is more than just services and risk management, it is as has been discovered recently, the gears that drive the economy, and to have this in the hands of a reckless and feckless few is wrong. Limits on their actions must be cast in stone just as limits on their benefits. Perhaps then we might see 'Executives' survive in the job more than a couple of years and as such reduce the need for them to make their buck fast.

  • Comment number 44.

    As Alexander Curzon put it "YAWN" to the FSA news.

    Journalists like yourself, are being led away from the REAL NEWS, that the Government has put not one penny of real money back into the REAL economy.

    All the money has gone in guarantees and some support to the banks.

    The rest, as so many unemployed are finding out too late, is just 'political posturing' and 'smoke and mirrors'.


    Its often hinted at that we need something like the French 'day's of action' to signal to the Government just how desperate it is out here in the Private Sector.

    The public sector is totally protected and immune at present.


    Worse still, we have the age-discriminatory APPRENTICES Scheme that allows young potentially unemployable people to stay off of the Unemployment Register

    And just as surely as Year End Accounting shows the 'black holes' in the Bank's books, there will come a time when the Gov has to reveal its enormous 'mother of all black holes' in its books.


  • Comment number 45.

    Muppets all round then!

    Long Overdue!

    But will they implement relative risk allowances?

    If the tax payer is footing the bill for the risk then shouldn’t the lending be LINKED to TAX payments?

    IS it not those who pay taxes who shoud be protected ?

    So the risl should be linked to benefot those who pay taxes ?????

    IE as I have said before

    LENDING should be a MULTIPLE of TAX PAID not a multiple of earnings.

    This would have the added advantage of allowing fine tuning of the lending at various tax levels which would allow lower tax payers the opportunity of taking relatively more or less risk.

    OR would that be too complicated for the mathamatically challanged FSA and GOV?

  • Comment number 46.

    The FSA has failed. As the FSA itself says, failure should not be rewarded. It is time for the FSA to be wound up and regulation given back to the Bank of England. The creation of the FSA has proved to be a complete disaster.

    I am not sure if Mervyn could have done any better, but from his moral hazard comments, you get the feeling he would have been tougher than the 'nice cops' at the FSA. He couldn't have done worse, anyway.

  • Comment number 47.

    Long Overdue!

    But will they implement relative risk allowances?

    If the taxpayer is footing the bill for the risk then shouldn’t the lending be LINKED to TAX payments?

    IS it not those who pay taxes who should be protected?

    So the risk should be linked to benefit those who pay taxes?????

    IE as I have said before

    LENDING should be a MULTIPLE of TAX PAID not a multiple of earnings.

    This would have the added advantage of allowing fine-tuning of the lending at various tax levels, which would allow lower taxpayers the opportunity of taking relatively more or less, risk.

    OR would that be too complicated for the mathematically challenged FSA and GOV?

  • Comment number 48.

    If these regulations go ahead, they will be celebrating in America. The US Government is notable in resisting most of the measures being advocated by the FSA. So all that will happen is the business will flow to Wall Street, and London will shrink. This is precisely what happened after the Sterling crises of the 1950s and 1960s. And of course the global situation will not change. We are wittingly enabling the US to achieve economic, military and financial hegemony. Aren't we clever!

  • Comment number 49.

    I am confused. The government is now going to regulate the banks and financial markets and we are going to be protected against similar crises in the future. But didn't the government do so in similar fashion in the 1960s and 1970s when we had a series of sterling crises? And didn't we have a regulated and largely nationalised industry when we had to invite the IMF to come bail us out in 1976? We have short memories.

  • Comment number 50.

    Not a mention about derivatives then? You know - derivatives, the things that are actually causing this whole sorry mess. Sorry I forgot - we are all waiting until they become worth something again and we all become fabulously wealthy once more. Don't report anything that the lower orders don't need to know about Robert and we will keep you in scoops for years

  • Comment number 51.

    "People are sick and tired of the high street banks and their management and are looking for ethical alternatives..... They are only proposing this as it appears to suggest they are doing something about it while they all keep their jobs and their privalidged positions." .... #15


    That may be quite so, Jericoa, but fortunately for them ....[the feather nesting cuckoos/faceless chickens who sit at the top tables of the Wild Western Fractional Federal Reserve Banking Ponzi (for are not the Islamic [Shariah] Banking System most notable by their Absence in the Financial Systems Meltdown?)].....there are others with a lot more and/or a different kind of Intelligence to Freely Share with them with the Main Primary AIM* of Getting the Finance System Working in a Better Beta System and Providing Wealth and Healthy Economies for All, with Currency Flow ...[rather than lauding and applauding and conspiring with Savings and Loans Banking to Stop the Easy Flowing Power of Money with a Self Centred Control of its Supply for the Artificial Power Control of its Printed Paper for a Perverse and Subversive Select Few, hidden behind the Scenes but always in Full View, with Obscene Personal Fortunes as Reward for Morally Hazardous Failure and Unethical Greed, now resulting in Total Toxic Collateralising Collapse ... with a Systemic and Endemic Meltdown of Core Assets and Guide Principles/Working Algorithms ...... which is a Human and Sub-Prime Ministerial Intelligence Failure with an Intellectual Property Deficit of QuITe Catastrophic Presidential Proportions and yet, even now as the house of cards edifice crumbles before your very eyes, would be that which you would consider able to offer a lead, for they run riot unopposed and brought not to heel. They thank you for your Stupidity and would Prey and Build upon it.

    ""Most significantly Lord Turner will repeat his pledge that the FSA will become less trusting that banks are usually doing the right thing; the FSA will abandon the prevailing dogma of the past 30-odd years that the market is always right," said our correspondent.

    "In a way, little of this is terribly surprising. The tragedy, perhaps, is that it's required financial calamity to bring about an outbreak of common sense."

    Lord Turner has already said his plans will amount to "a revolution"." ....

    It is always best that any who even think to change a Corrupted Banking System into a Powerful Currency System always assume that Banks and Bankers are never doing the right thing, thus will they ever be safe-guarded against doing the wrong thing.

    And one can full expect, should Lord Turner be just another impotent Paper Tiger, papering over the cracks and leaving the Core Drivers and Main Pariah Players alone, that his wish will come true with it delivered by IT in a morning, and in a perfectly formed, Perfect Storm Form, for it has been a long time in sophisticated gestation and thus Immaculately Borne and Born ....
    “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford

    Some "Plain Talking is the Answer, I believe." offers an alternative approach and AIMasterPilot Program for ALIVEAIdDS** BetaTesting in the Field .....

    And if you think Revolutionary Changes are Required, then they too can be Easily and Immediately Supplied and Accomodated with Advanced IntelAIgents Research Evolutions .... ..... such is the Fluid NEUKlearer DynamIQ of HyperRadioProActive ProgramMING NIRobotIQs.

    *Advanced IntelAIgents Mission
    **Asymmetrically Linked InterActive Virtualised Environments of Advanced IntelAIgently designed Digital Systems

    And perhaps the BBC, Robert, would Care 42 Dare Win Win in the Greatest of Great Game Plays .... the Future of XXXXistence ..... and itself do the Most Honourable and Nobel Thing and Directly Report of ITs XXXXistence and Persistence of InterNetional Being .... for the Nation and Nations, and of course, ESPecially so for All into Speaking Peace unto Nations .... and of course also and not least, Directly to the Broken Heart of Parliamentary Cabinet Government, so that they are Charged to Deal with IT Presently and Unavoidably. For far too long has their Arrogance and Ignorance in the Inelegant Disengagement Strategy of Zero Communications for Applied Silence and Distributed Denial of Service been exercised and tolerated.

    And I do declare that it is my Inalienable Right to Insist that it be so done ..... and should any think to disagree and try to Impose their Negative Will/any other Will on what is a Positive, if somewhat Unconventional and Irregular dDevelopment, Selflessly Shared for Universal Consumption, then they will be Personally Identified and Publicly Challenged to Present their Case for Open Transparent Peer Media Review aka Honest Debate.

    Thank You. And have a Nice dDay, y'All.

  • Comment number 52.

    Lord Turner's FSA - the people who failed to do their job in supervising the pig's trough mentality of Britain's financial community - are the problem.
    The FSA have failed.
    Their duties should be passed to the Bank of England and their personnel invited to seek work elsewhere.

  • Comment number 53.

    Sadly this news means..THE END OF LONDON AS FINANCIAL CENTRE...we have, through our greed and stupidity given the financial crown away.. and who will pick it up ???

  • Comment number 54.

    One issue which needs looking at, is how banks account for loans on their profit and loss and accounts. In too mnay cases the profit for the entire loan is attributed to the loan at the time it is taken out, rather than amortising it over the period of the loan.

    While this has the effect of artificially inflating the p&l and balance sheet at the time, the bad debts are then written off subsequently, causing this massive seesaw effect we have seen recently.

    If banks were forced to amortise loans over the lifetime of the loan, with bad debts being accounted for as soon as they happen, I believe this would give a far more accurate and stable picture of the state of their finances.

  • Comment number 55.

    Same old people same old “CLICK”. FSA not fit for purpose and certainly not trustworthy.

    Look at what’s happening to real people (ie people not with the banking sector) and write an article how thousands of ordinary investors are suffering financially and possibly facing ruin through the actions of the FSA.

    How ordinary people are fobbed off when seeking information and becoming angry and frustrated when the FSA don’t give answers.

    That’s part of the real world but because we are only small and insignificant its easy for the FSA to shrug off and wipe us under the carpet. Ordinary people have nowhere to complain other than sites like these and hope someone puts the real facts out.

    Ask Lord Turner to sort this one out. Maybe he can put his own house in order.

  • Comment number 56.

    Ironically, today, there is also a story about local government not using jargon. The FSA's proposals, to many people, will just seem like a pile of technobabble.

    What the FSA needs to do is to create a framework of standards and then clear mechanisms of scrutiny and implementation, including clear consequences (i.e. sanctions) for those who transgress the regulations, e.g. expulsion from the profession / industry. And all of that needs to be understandable, in the main, by the man on the Clapham omnibus.

    (That is, the clean up of the finance industry's act is for the masses sake as much, if not more, than for the finance industry's sake.)

    Then, and only then, will people a) believe it is safe to trust banks again and b) believe that financial things ARE getting better, i.e. that someone IS actually doing about it.

    No-one needs rhetoric or sound-bites, we all need outcomes.

    Or, to put it another way, the finance industry does not just need to be cleaned up, it needs to be seen to have been cleaned up and that needs to done convincingly in order to regain trust.

    If we don't regain that trust, everyone will keep there savings in cash under their mattresses, away from the grasping hands of bankers (and out of sight of the tax man!)

  • Comment number 57.


    Meanwhile the IMF has revised its forecasts and the UK again outperforms the rest of the world!

    Sorry I was getting a bit delusional there..

    Nope, Britain will be the last economy to come out of the recession in an articlein the Times today:

    In January the IMF forecast a contraction of 2.8 pct this year, but has revised this to 3.8 pct which would be the sharpest since 1944. In 2010 the forecast is a contraction of 0.2 pct.

    These are awful figures. But to put this into context, normally the nation hosting an Olympic Games will see a short term spurt in growth in the construction of facilities etc. London and the South east are a paradox, as some parts are very wealthy but the underlying unemployment rate before the current economic crisis has hovered around 8 pct. I live in the home counties in a fairly affluent small town, and the number of shop closures is reminiscent of the early 1980s.

    So Robert, as per other comments. Stop blogging on banks and concentrate on normal business and why demand is not there to buy foods and services. What would kick start confidence, as opposed to the latest utterance from Brown or Mandelson. A few weeks ago you went up to Newcastle regarding Northern Rock. More of the same please?

    You should get out more!

  • Comment number 58.

    Lord Turner claims his proposals are a 'revolution' when in fact they are just a partial return to common sense and how things used to be in the Financial sector before the current madness. If only we could turn the clocks back to the time before Gordon Brown became the worst ever Chancellor of the Exchequer.

  • Comment number 59.

    Make banking safe?

    How about a Bank of England to regulate it, like it used to be before thieving Blair and his pickpocket Brown betrayed our country?

  • Comment number 60.

    As soon as the economy picks up all this will be forgotten. Cant regulate because of globalisation? Interesting that apparently we have no trouble bailing out on a national basis.

    Only by a permanent element of public ownership with consumer and government representation do we stand a chance of avoiding history repeating itself in 10 to 15 years.

  • Comment number 61.

    About time too. Looks like Mr. Santz (FSA) is finally being forced to wake up and end the light touch regulation. But a little bit too little too late......

  • Comment number 62.

    In the American case of Madoff, the Securities and Exchange Commission failed abysmally.

    If investors had done proper due diligence on Madoff, he would have been found out years ago.

    Investors were lulled into a state of complacency because the SEC still allowed Madoff to run his Ponzi scheme in spite of them being warned about him.

    We don't need more regulation, we need less government interference and the free market should be allowed to operate.

    But unfortunately Fabian New Labour (do a search) wants more social control, not less.

  • Comment number 63.

    Timing on all of this is terrible.The government are saying that key to recovery is getting the banks lending. They tell us that there is a huge lending capacity shortfall left by disappearing foreign banks and a collapsed securitised debt market. I have looked without success for the figures involved. The FSA 2009 Outlook points to a massive drop in borrowing, in part due to capacity failures in credit supply. There is still a question as to whether banks are under capitalised to respond to credit demand that survives the recession. Mixed messages come from the policy makers. On the one hand, they cry for reform - on the other they demand increased lending. We're told capital ratios are being relaxed to aid recovery, and yet the FSA in their 09 Outlook make it clear they are warning banks to deleverage and prepare for stricter capital ratios in the future. Going concern audit rules are having to be moderately applied to assist confidence. Central bank money is being used to reduce the real costs of credit, and yet the banks are being told " pull your belts in" and " fear the regulator".

    Who is getting this act together?

  • Comment number 64.

    Crude limits on salary multiples do not work:
    Person on Salary £20k with no debts can comfortably afford to borrow more than £60k.

    Person on £50k with £30k credit card debt to service and an ex wife + kids to support and a taste for the good life will struggle to support £150k mortgage.

    Each individual should be looked at as an individual and leant to according to net income and ability to live within their means. This risk assessment would be carried out by people called bank managers. It once was considered a respectable profession in this country. The banks removed this function from their branches years ago and turned them into sales outlets run by school leavers with sales targets.

  • Comment number 65.

    All pretty fatuous as few people are now able or willing to borrow to these levels anyway. Should have been done years ago but now can safelt be left for years into the future. Talk about acting pro-cyclically!

  • Comment number 66.

    So these rules will apply to all the loans the government is demanding that the banks make to failing businesses and dodgy mortgages at the moment. This is another set of Labour rules that will never see the light of day , or if they do, will be like the failed asylum seekers going home ,on a voluntary basis no doubt.The government has lost all credibility and control , it must go and let someone else repair the damage.

  • Comment number 67.


    The policies of the Govt are just not leading us back to solid ground. I made a comment on one of your posts months back that I feared that the UK would be left well and truely behind the rest of the leading economic nations. Time has gone by and now I'm even more convinced of this when judging how Brown and his Govt have dealt with this economic crisis.

    IMF are now saying that the UK will be the only major country who`s economy will contract in 2010. The others are only forecast to show very small percentage of growth - but it is growth none the less.

    At this point I don't think it really matters who will form the next Govt as the mess they will need to try and sort through will mean cuts in spending and taxes to the hilt!!

    "UK Economy to Contract in 2010"

  • Comment number 68.

    FSA Careers and benefits

    Get on in there boys and girls.

    Rewards & benefits

    Related information
    The Staff Handbook provides a guide to our 'people' policies.

    Staff handbook

    With your work comes reward. Our success depends on the quality and performance of our people. We want to ensure that we attract and retain the right people by offering a competitive 'total reward' package. Some of the rewards that you can expect are set out here:

    Salary and Bonus
    A competitive market-based salary that reflects your skills, knowledge and overall contribution to the FSA. You can earn a performance-related bonus of up to 35% of salary. We focus on rewarding our highest performers.

    We operate a generous benefits package that includes as standard:

    20 days holiday (you can extend this to 35 days as part of our flexible benefits scheme);
    a highly competitive non-contributory pension scheme;
    life assurance;
    private medical insurance;
    permanent health insurance;
    occupational sick pay;
    employee assistance programme;
    health screening; and
    an interest-free season ticket loan up to the value of £5,000.
    And, at our Headquarters building,

    a subsidised restaurant; and
    a subsidised gym.
    To add to this, we provide an attractive flexible benefits allowance that allows you to opt for dental cover, childcare vouchers, travel insurance and top-ups on other benefits, including holiday and pension.

    If you don't want to buy extra benefits with your allowance, you can simply have the extra cash.

    Learning, development and other rewards
    But, of course, working at the FSA is not all about financial rewards. It also gives you:

    unique insight into the full breadth of financial services;
    the chance to contribute first-hand to the financial well-being of millions of UK consumers and to the health of our financial markets;
    access to excellent learning and development opportunities;
    a wide range of interesting jobs and varying career paths;
    a reasonable balance between work and home life, including flexible working arrangements; and
    support for you to achieve both your personal and professional development objectives.

  • Comment number 69.

    Shut down the FSA, like so much put in place by this government is not "fit for purpose".

    Bring back the Governor of the Bank of England with the Kray twins as his advisers. Fred would have received a pension but he wouldn't have been able to spend it :)

  • Comment number 70.

    The horror of the situation is that everything emerging from the government, the Bank of England, the FSA and the American president and his cohorts tells us that they want to get back to business as before with a nip here, a tuck there, some strong language for naughty bankers, then honours all around, obscene salaries, eye-watering bonuses, and fat, fat pensions. Oh, and of course, when Gordon & Co are thrown out, the bankers will be there with million dollar jobs for him, or even the job of international baking regulator. Now that's what I call delegating the security of the hen house to a pack of foxes.

  • Comment number 71.

    There is a very simple solution to this problem, which wouldn't cost a penny and unlike the incredibly complex regulatory framework which not even the regulator completely understands, might actually stand a chance of working. This solution is to make bankers personally liable for the debts of their businesses (i.e., force them to become unlimited liability partnerships). The underlying problem that everybody is choosing to ignore is that what is in the best interests of the bankers is not necessarily aligned with what is in the best interests of the banks themselves, and certainly isn't aligned with the best interests of the wider economy. Why is it then that we expect bankers to act in some other way than their own self-interest? Regulation will do nothing to solve this rather big problem. By making bankers personally accountable for the financial outcomes of the decisions they are making these interests would become very much more aligned.

  • Comment number 72.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 73.

    Am I missing something. Paul Myners headed up Gartmore that was bought by NatWest. He then became a senior executive within Nat West which is now, of course RBS. Mr Myners has a very very substantial pension fund from NatWest/RBS. None of this "conflict" appears to be being disclosed -and it may also be clouding his judgement on the issues both now and just prior to Mr Goodwin's departure

  • Comment number 74.

    Your Chairman, Lord Turner, is being quoted in the media this morning (See as proposing that home owners’ mortgages should be restricted to 3 times salary.

    This is a reckless proposal to make public at this stage and will cause millions of home owners unnecessary anxiety. Specifically, is Lord Turner proposing that when my current mortgage deal comes to an end I and my family should either be evicted or required to remain on the expensive standard variable rate of my existing lender (as no other lenders will be permitted to lend to me)?

    My home has a 60% LTV; however my mortgage is 5 times my salary.

    Frankly, very serious UK financial policy decisions should not be played out in the media. There has been far too much short-term sound bite political influence in the UK banking sector over the last 12 months and the FSA should be above this behaviour.

  • Comment number 75.

    If, as we are told by some, this was all down to Thatcher's time & deregulation, how come in 2001 UK Banks had zero exposure to the global loans but 7 years later were way out of their depth? Did it take them until 2001 to realise they were free to do as they liked, which given the judgements they have made doesn't sound too fanciful, or is there another reason linked to our Government policy?

    Even though I've suffered badly, despite spreading my savings to avoid risk (I managed to spread them around ALL the dodgy things, property, banks , fiancial service companies - mind you I would have liked to invest in maufacturing but Marconi put me off that!) I would still rate Capitalism above the State. A major reason I'm in debt is that since 1997 I have had virtually zero increase in my income, yet my outgoings have soared and bringing up a family has meant that I have had to borrow to fill the gap. That is all down to Brown's fiddled figures for inflation and his Giovernments obesssion with both outsourcing jobs and importing workers. My mistake was in thinking that a Mortgage with savings was the best way to 'insure' my family's future committments such as education fees, I could have almost halved the mortgage had I not kept savings, that would have meant I didn't lose so much, and now could maybe afford the mortgage, although maybe not the education, as it is who knows whether I'll be able to even afford the Mortgage. Much as I will rejoice at labour's anihilation at the next election, I will be sad that Cameron and the Tories get back in, or even worse the Lib-Dems.

    I thnk another big issue is control over the Pension funds, these funds are from workers and give the fund managers immense power, yet they are Kings in their own domain. Who controls them, who has power to stop them allowing these astronomical rewards in the boardrooms, and even worse, why are they so well rewarded? I seem to remember one famous fund manager lsoing money to Madoff - given the salaries they earn one would have thought that something too good to be true would have been researched to see if it was! Individuals need more power over their savings, and the idea of a 'pension fund' and savings needs to be examined so that they become almost synonymous, also 'means testing' should not take just the mount saved into consideration, but also the amount earned. I know so many old people who have saved a surprising amount over their lives from a pittance of an income because they sacrificed the pleasures that younger people with large incomes will not, yet the poor saver is punished, the rich squanderer rewarded by Government.

    Government, and Brown in particular have a large responsibility for the UK's mess, so I don't want any more Government involvement other than some laws to allow individuals to hold bosses and Politicians to account. For the life of me I cannot see how Hornby & CO at HBOS nor Blank & Daniells at Llloyds and Crash Gordon can't be held to account for the disaster that is the Lloyds Banking Group, they were all either corrupt or negligent so why can't they be sued!

  • Comment number 76.

    Sounds like closing the stable door long long after the horse has bolted!

    I have been writing to the The Treasury and the Bank of England urging this and similar actions for well over a decade and I am afraid unless and until we see legislation and actions I remain highly sceptically.

    On Today (Radio 4) I heard a spokesman for a mortgage broker saying that the 3 times income cap on mortgages was not right as it was affordability that mattered - WRONG! This is precisely the stupidity that got us into this situation. This is the stupidity that gave rise to unsustainable asset price inflation that gave us the mortgage default swaps that have destroyed the World's economy. This man obviously still does not get it - His party is OVER!

    Oh, and by the way, house prices will crash! (driven by the new FSA policies!)

  • Comment number 77.

    Thank you CLIVE-P #21

    for drawing attention to the Neo-liberalism essay by Kevin Rudd.

    It is the clearest explanation of our economic situation I have seen. The fact that a prime minister is prepared to sign off such an damning expose of our economy is brave and astonishing.

    At 8000 words it will take a good few minutes to read through, so for busy BBC journalists here is a summary;

    " The Reagan/Thatcher Neoliberalism experiment has FAILED,The emperor had no clothes.The free market fundamentalism it has produced,has been revealed as little more than personal greed dressed up as an economic philosophy. And ironically it now falls to social democracy to prevent capitalism from cannibalising itself "

    It is so refreshing to read an article that points to a different way forward and acknowledges that to tinker with the present dead horse will get us further into economic disaster.

    Thanks again Clive. You are probably right though, it wont be in British interests to read it, let alone to act on it.

  • Comment number 78.

    People who do not know how to shut stable doors in time should not be allowed to own horses.

  • Comment number 79.

    What we need is an admission from the great and good that their entire management ethos of targets and bonuses is a shambles and those of us who said many years ago that this would be the outcome should now get the recognition we deserve. Fat chance of that ever happening!

    The parallels between the state of the financial sector and the mess at Mid Staffordshire NHS are quite apparent. In both cases the presumed regulator was asleep on the job as management became other-directed in the pursuit of perceived rewards. True professionalism needs to be re-established.

    Now we know that the old-fashioned ideas work best we should adopt radical measures to reverse all the radical measures and make our society once again boring and safe.

  • Comment number 80.

    I don't know how Turner has the Ed Balls to sound so bumptious on the matter. This is a clear statement that the regulator failed in it's responsibilities to safeguard the financial system. It is easy to come up with solutions to specific problems in hindsight but more importantly what should be explored is if there is something inherently wrong with the regulatory system that will miss the problems leading to the next major crisis? This though would require Brown to hold his hands up and admit that the tri-partite system he created is fundamentally flawed, a tinkering too far.

  • Comment number 81.

    #71 "....make bankers personally liable for the debts of their businesses (i.e., force them to become unlimited liability partnerships)...

    I agree - indeed, I would go further: limited liability should not apply to executive directors of public companies. They should be as liable for the results of their actions as, say, the driver of a car. (But directors should be legally non-insurable.) There have been too many directors who have managed to damage/destroy companies, walk away with a payoff and then do it again somewhere else. A certain former executive of both Railtrack and Woolworths comes to my mind.

    Restricting limited liability might be almost as effective a deterrent as "Chinese Justice".

  • Comment number 82.


    Citicise King and you get moderated they did not like the acronym I guess.

    Mervyn King, the Governor of the Bank of England, last night warned of the danger of a return to an era of mass joblessness.

    Speaking to bankers at the Mansion House in London, he highlighted the “extraordinarily sudden, severe, and simultaneous downturn of activity and trade in every corner of the world economy” since last autumn.

    “Most of us have come from the generation that grew up believing that mass unemployment and world recession were things of the past, relevant to the history books but not the textbooks ... That assumption is under threat,” he said.


  • Comment number 83.

    Banking is more akin to an elephant than a horse.

    When stabling an elephant you try to back him in.
    He will get out when he wants to, however much you hope he will not.

    It is easier and cheaper to repair the door than the wall.

  • Comment number 84.

    Much as our beloved PM tries to tell everyone that the root cause of all evil in the banking system was caused by lending policies in the US, surely a case could be made for saying that his much vaunted 'light-touch' regulatory body was equally responsible?

    After all, even if the UK market wass in a spin, it was the lack of oversight in this country that allowed our own banks to copy the lending policies and to get involved in the US markets so disastrously.

  • Comment number 85.

    Constraining lending in the way proposed will only compound the economic slump further, and lead to a continued fall in asset prices.
    The UK could be in for an even nastier future if the rest of the world begins to recover before it. Commodity prices will start to rocket back to their levels pre credit crunch (oil at least $150), a weakening sterling will lead to high inflation only contained by higher interest rates, stagflation will no doubt ensue. The UK is very vulnerable in this respect, speculators were able to cause a run on sterling in 92,today they have even more weapons in their arsenal.
    The role that the oil price played in this crisis is being massively over-looked. Without the speculation that caused oil prices to rocket so high, interest rates could have been cut a lot earlier(personally believe interest rates should have been cut anyway as inflation was not being driven by increase in UK demand). Speculation in this way needs to be looked at, I don't advocate the prohibition of derivative trading I understand the useful role this plays, but we have to do something to prevent unnecessary commodity price spikes in this way. That's what governments and regulators should be focusing their attentions on.

  • Comment number 86.

    I can't believe how lightly you and your fellow BBC commentators are letting off the FSA and the Government over this one.

    Regulation shouldn't be about 'light or 'heavy' it's about the right touch. Since the FSA was launched we have had several examples where the regulator has fined banks heavily for poor record keeping despite no evidence of loss having occured yet they completely ignored the overall business strategy of these businesses.

    If the regulator demands that a business focuses on the minor detail is it any wonder that company's internal risk management fails to address the wider issues?

    Mervyn King in his speech yesterday addressed this issue and also asked the Government to explain how the vast debt is expected to be repaid yet the BBC simply reports the FSA view without question.

  • Comment number 87.


    this is clearly a WHITEWASH; the City is not going to be regulated proactively and properly and it certainly won't regulate itself

    the great 'red Adair' Turner was, as the FSA bibliography confirms,

    'from 2000-2006 Vice-Chairman of Merrill Lynch Europe'

    so he was high-up in ML for a long period (6 years!) embracing the years when the worst and most extreme risk-taking excesses were being committed; does anyone need reminding about Merrill Lynch, the huge black hole discovered in their accounts last autumn and, to cap it all off the absolutely massive bonuses they gave themselves on the day before they were absorbed into BoA???

    I rest my case and I'll knock Cherie Blair into a cockhat in a courtroom any day, thank you very much

  • Comment number 88.

    Yep....JOHN from HENDON

    House prices will crash.

    Sorry to be so pessimistic, but the banks are looking for reasons not to lend. The mortgage lending adverts you see in the press are not real. Try applying for one and it will disappear into the ether.
    I am paying a Standard variable rate at which is 4 x greater than the base rate and despite having a large chunk of equity ( well, I did have ) I cannot remorgage for love nor money.

    The statistics speak for themselves;

    3 X average income of 33,000.= 99,000 Plus a minimum 10 % deposit at 10,000. ........................

    Average house price needs therefore to be £ 110,000. Not £205,000.
    You can scale the figures up or down depending on your present value.

    To make things even worse the average salary is not the "mean" salary that most people earn. That figure is £21,000!

    When interest rates rise you can guarantee that most banks will match the rise within hours ( rocket and feather syndrome....rocket up and feather down) and millions of people will be out of their homes and looking for non existant council housing.

    Or maybe, just maybe , the Government have planned for this outcome, and they are about to announce a plan to help people who are losing jobs and houses.

  • Comment number 89.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 90.

    Robert says: 'In a way the tragedy is that it's required financial calamity to bring about an outbreak of common sense.'

    This is a tragedy and at least the First Lord of the Treasury and the Governor of the B of E have lacked sufficient common sense to have even mitigated this tragedy. Sadly for them, their positions become increasingly unseemly the longer they remain in post.

    Everybody appears united in their conviction that failure should not be rewarded.

  • Comment number 91.

    seperation of ivestment banking from retail?

    I thought that was a must. Using the revolution word is spin to make you think they are being hard on bankers. A revolution would be the above.

  • Comment number 92.

    Counter cyclical capital adequacy rules sound like a pretty silly idea to me. They could be very easily manipulated by changing the definition of the economic cycle - just as Brown did when he was Chancellor in order to pretend he was still meeting his "golden rule" about balancing the government books over the cycle.

    We surely should have capital adequacy rules though to keep the banks strong. After all, it protected the US banks from all these credit crunch problems, didn't it?

    Actually isn't the best approach to abolish the FSA and re-empower the Bank of England who do at least seem to know roughly what they're doing?

  • Comment number 93.


    Hector Sants similar midden

  • Comment number 94.

    #8 "In the meantime Robert, as many bloggers are suggesting, please write SOMETHING about what's happening in the real (ie non-banking) economy to real people. How is this crisis affecting wages close to the bottom, and what effect will that have on deflation?"

    Since Stephanie Flanders is the new Economics Editor, perhaps Robert is the new Banking Editor, devoted to all manner of news and issues to do with banks and banking !!

  • Comment number 95.

    The FSA is just another expensive self-serving quango that we cannot afford. Sooner it's disbanded the better.
    Messrs Turner and Santa are just wasting their time and our money with their useless pronouncements.
    Boring - boring -boring.

  • Comment number 96.

    The real effect of a complete failure of regulation by the FSA and their equivalents in other countries has been to repeat the history of a earlier unregulated age showing that despite what has been said here about the depression of the thirties earlier examples have been ignored too.

    The first "GREAT DEPRESSION" of the global economy era began in the USA in 1873 with a collapse in confidence after a period of rapid debt fuelled expansion. That one lasted about TWENTY THREE YEARS until 1896 and provoked all the industrial economies to retreat toward protectionism and resulted in rapidly rising public debt. There followed a period of massive unemployment and a retreat to conservatism.

    I wonder what is going to happen next...

  • Comment number 97.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 98.

    On Today (Radio 4) I heard a spokesman for a mortgage broker saying that the 3 times income cap on mortgages was not right as it was affordability that mattered - WRONG! This is precisely the stupidity that got us into this situation. This is the stupidity that gave rise to unsustainable asset price inflation that gave us the mortgage default swaps that have destroyed the World's economy. This man obviously still does not get it - His party is OVER!

    Oh, and by the way, house prices will crash! (driven by the new FSA policies!)
    I diagree - it is affordability that matters but that does not mean going back to the lunatic lending of the past few years

    If someone borrows £75,000 against a salary of £25k then the payments will obviously be a lot lower if mortgage rates are at 5% rather than 10%. If a formal cap does need to be brought in ,because lenders can't be trusted to act responsibly, than I would rather this was done by comparing the monthly payments against the person's net disposable income.

    You are right that if a cap is introduced you can kiss goodbye to a housing recovery for many years. I think it is the probability that house prices will crash further that will prevent any Government daring to inroduce such a measure.

  • Comment number 99.



    READ PAGES 1, 6-7 AND 32


    I trust that I am allowed to say that moderators? You can't protect everyone in banking. There are way too many of 'em to watch out for

  • Comment number 100.

    We really have to get over this whole banking 'scandal'. Economics reporters would be better focussing on how we can get out of this mess,which is by no means obvious,rather than this endless and tiresome hunt for scapegoats.


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